Dotcom claims he has emails between New Zealand Prime Minister John Key and Warner exec Kevin Tsujihara in which Tsujihara explains that Dotcom was followed by private security in Hong Kong and that Key had made the extradition promise to Warner as part of the deal to shoot The Hobbit in NZ (the MPAA, Warner and Key's office all dispute the email's authenticity).

Kim Dotcom, proprietor of the defunct Megaupload, is convinced that the raid on his company was crooked, and he's put up a $5M bounty on information that will help him prove misdeeds on the part of the US or New Zealand authorities:

GCSB, New Zealand's secret police force has admitted to illegally deleting key evidence related to the raid on Kim Dotcom over his Megaupload service. The spies agree that the evidence was illegally deleted, but claim it was an honest mistake, because the data "aged off" their retention system.

Nearly one year ago, the U.S. government launched a global takedown of Megaupload.com, with arrests of the leading executives in New Zealand and the execution of search warrants in nine countries. Canada was among the list of participating countries as the action included seizure of Megaupload.com servers.

Last week, a Canadian court rejected a request to send mirror-imaged copies of 32 computer servers to authorities in the U.S., indicating that a more refined order is needed. Megaupload successfully argued "that there is an enormous volume of information on the servers and that sending mirror image copies of all of this data would be overly broad, particularly in light of the scantiness of the evidence connecting these servers to the crimes alleged by the American prosecutors."

Kim Dotcom is going to sue the US entertainment industry and the US government over the illegal raid on him and Megaupload, and has promised to use his winnings to pay for free Internet access across New Zealand. The Guardian's
Peter Walker reports:

The latest salvo involves resurrecting a planned second fibre optic web cable across the Pacific to the US, which would have doubled New Zealand's available internet bandwidth. A New Zealand company, Pacific Fibre, hoped to build the £200m link but announced in August it could not secure the funding.

Dotcom's proposal is to supply broadband free to domestic customers, charging only businesses and government users, the New Zealand Herald reported. His share of the capital would be provided by lawsuits against the US government and film studios for their "unlawful and political destruction" of his business, he said.

U.S. District Judge Liam O'Grady in Virginia has scheduled a hearing to adjudicate a claim from Kyle Goodwin, a sports videographer in Ohio whose videos have been lost since the illegal raids in May on Megaupload, a file-locker service. The MPAA has asked to participate in the hearing in order to object, in principle, to the idea that the millions of Megaupload users who've had their files seized in the raid should be able to access them without "safeguards." More from CNet's Declan McCullagh:

The MPAA said today that while it takes no position on Goodwin's request to have his own copyrighted videos returned, it wants to participate in the hearing to describe "the overwhelming amount of infringement of the MPAA members' copyrighted work on MegaUpload." (The MPAA's six members are Paramount Pictures Corporation, Walt Disney Studios Motion Pictures, Twentieth Century Fox Film Corporation, Universal City Studios LLC, Sony Pictures Entertainment Inc., and Warner Bros. Entertainment.)

To those Hollywood studios, MegaUpload and its flamboyant founder Kim Dotcom represent the darkest elements of Internet file-sharing. MPAA chairman Chris Dodd has dubbed it "the largest and most active criminally operated website" in the world, and MPAA vice president Michael P. O'Leary claims it's one of the most popular Internet sites "for streaming and downloading illicit copies."

"It makes little sense for the MPAA, or MegaUpload, or Carpathia, or even the government -- despite its actions otherwise -- to prevent third parties access to their legal property," Julie Samuels, staff attorney at the Electronic Frontier Foundation, told CNET this afternoon. "Not only does it harm those individual third parties, but it negatively impacts all cloud storage providers and customers, who, in order for the technology to work, need to be able to rely on access."

New Zealand Prime Minister John Key issued an official apology to Kim Dotcom for illegal spying conducted by the Government Communications Security Bureau (GCSB) -- the NZ equivalent to the CIA, which is prohibited from engaging in domestic spying. Nevertheless, GCSB conducted a program of surveillance against Dotcom and his associates as part of the US-led shutdown of Megaupload, Dotcom's file-locker service, which had angered the US entertainment industry.

The GCSB reports to the Prime Minister's office, so it's not clear how this surveillance could have gone on without the oversight of Key or his staff. Paul Neazor, Inspector-General of Intelligence and Security for New Zealand, reported on the illegal spying, explaining that it took place because the GCSB mistakenly believed that Dotcom did not have permanent residency in New Zealand, making him fair game for surveillance (visitors to New Zealand, take note).

However, as a Computerworld NZ article shows, the "Blue Folder" prepared by NZ police's anti-terrorist Special Tactics Group for the intelligence service shows, Dotcom's residency status was clearly set out. Also, Dotcom set off $500,000 worth of fireworks when he was awarded residency.

Neazor found that the Government Communications Security Bureau (GSCB), which by law can only conduct action against foreign targets, failed to check Dotcom’s immigration status. If they had done so they would have discovered he hold’s a permanent resident’s visa.

“The GCSB relied on information provided to it by the Organized and Financial Crime Agency. In my view, reliance on another party by GCSB is unacceptable,” Key said.

“It is the GCSB’s responsibility to act within the law, and it is hugely disappointing that in this case its actions fell outside the law. I am personally very disappointed that the agency failed to fully understand the workings of its own legislation.”

New Zealand's foreign intelligence spy body, the Government Communications Security Bureau spied on Kim Dotcom at the behest of the US government, despite the fact that they are legally prohibited from conducting domestic surveillance. The NZ prime minister has ordered an inquiry, stating that the GCSB acted "unlawfully" in spying on Dotcom and his associates. Opposition leaders point out that only the PM's office could have authorized the spying, and suggest that the PM is saving face by ordering the inquiry now that the facts have come to light. More from TorrentFreak's enimgax:

Key says that he learned of the unlawful activity after speaking with the head of the GCSB last Monday and then took action to refer the issue to the Inspector-General, Hon Paul Neazor, who has the power to investigate matters related to the GCSB’s compliance with the law.

“I expect our intelligence agencies to operate always within the law. Their operations depend on public trust,” Key said.

“I look forward to the Inspector-General’s inquiry getting to the heart of what took place and what can be done about it. Because this is also a matter for the High Court in its consideration of the Megaupload litigation, I am unable to comment further,” Key added.

While the GCSB acting illegally is clearly an embarrassment for the government, Prime Minister Key now has some serious explaining to do. GCSB is a department that is responsible directly to him, a point not lost on Labour leader David Shearer.

“This is a shocking breach of New Zealand’s very strict laws restricting the ability of our spy agencies to snoop on people,” Shearer said in a statement this morning.

Kim Dotcom, proprietor of the legally embroiled file-locker service MegaUpload, says that Joe Biden personally ordered the illegal raid on his business and his house in New Zealand. Biden's an old pal of Chris Dodd, the former senator who now runs the MPAA, and a TorrentFreak investigation shows that Biden met with Dodd and the execs from MPA Pacific-Asia, Sony Pictures, Universal, and Disney a shortly before the raid.

Remember earlier this year when the New Zealand government and the US government conspired to send a SWAT team to arrest Kim Dotcom, founder of Megaupload, shut down the service, make 220 people unemployed, seize Dotcom's assets, and deprive millions of users of access to their files? Well now a US judge says that the trial against Dotcom will probably never proceed, because the US government didn't ever formally charge Dotcom. This wasn't a mere oversight, either. They were not legally allowed to charge him. TorrentFreak reports:

“I frankly don’t know that we are ever going to have a trial in this matter,” Judge O’Grady said as reported by the NZ Herald.

Judge O’Grady informed the FBI that Megaupload was never served with criminal charges, which is a requirement to start the trial. The origin of this problem is not merely a matter of oversight. Megaupload’s lawyer Ira Rothken says that unlike people, companies can’t be served outside US jurisdiction.

“My understanding as to why they haven’t done that is because they can’t. We don’t believe Megaupload can be served in a criminal matter because it is not located within the jurisdiction of the United States,” Rothken says.

Megaupload’s lawyer adds that he doesn’t understand why the US authorities weren’t aware of this problem before. As a result Judge O’Grady noted that Megaupload is “kind of hanging out there.”

If Judge O’Grady is to be believed all this damage could very well have been for nothing because the authorities simply can’t serve foreign companies. This could lead one to wonder whether the whole setup was to simply destroy Mega’s businesses.

This is certainly a theory Dotcom subscribes to, and it’s not the only dirty trick Megaupload’s founder believes the US Government is playing. The US is structurally denying Megaupload the chance to put up a fair fight.

“We are refused access to the evidence that clears us, we are refused funds to pay our lawyers, we are refused to pick the lawyers we want to represent us and have any chance for a fair trial,” Dotcom says.

For Megaupload the worst part is that the damage can’t be undone. The site has been completely destroyed as well as the plans to become a publicly traded company.

“We have already been served a death sentence without trial and even if we are found ‘not guilty’ which we will, the damage can never be repaired,” Dotcom says.

If you're one of the millions of MegaUpload customers whose data is endangered by the entertainment industry's legal action against the company, EFF wants to help you get your files back. They've teamed up with Carpathia Hosting, the company that hosts MegaUpload's servers, and created Megeretreival.com. The US DoJ's plan to destroy the files -- and the evidence! -- hosted on MegaUpload's servers has been delayed by two weeks, and the Electronic Frontier Foundation will use that gap to advocate on behalf of users whose financial data, personal files, movies, videos, writing, and creative work were hosted on MegaUpload.

EFF is troubled that so many lawful users of Megaupload.com had their property taken from them without warning and that the government has taken no steps to help them. We think it's important that these users have their voices heard as this process moves forward.

~ Julie Samuels
Staff Attorney at EFF

Carpathia does not have access to any data for Megaupload customers. We support the EFF and their efforts to help those users that stored legitimate, non-infringing files with Megaupload retrieve their data.

Megaupload founder Kim Dotcom, a German national formerly known as Kim Schmitz, is seen at court in Auckland, New Zealand in this still image taken from video shot on January 23, 2012. The file-sharing website founder was ordered to be held in custody by a New Zealand court on Monday, as he denied charges of internet piracy and money laundering and said authorities were trying to portray the most negative picture of him. (REUTERS/TV3 via Reuters Tv)

The saga of Universal Music's war on the Mega Song (a song and video recorded by several major artists in support of the online service MegaUpload, which Universal is trying to have censored in the USA through its support of the Stop Online Piracy Act) just got weirder. Many of us were baffled that Universal kept telling YouTube to take down this video, even though it was clear they didn't hold a copyright to it -- a fact reinforced by artists like will.i.am, who insisted that he hadn't authorized Universal to send the takedown notice.

Now, a court filing in the matter from Universal claims that the takedown wasn't issued because Universal claims a copyright in the Mega Song, but rather, they claim that they have a private contract with Google giving them the power to take down videos they dislike, regardless of whether they are the rightsholder.

Your letter could be read to suggest that UMG's rights to use the YouTube "Content Management System" with respect to certain user-posted videos are limited to instances in which UMG asserts a claim that a user-posted video contains material that infringes a UMG copyright. As you know, UMG's rights in this regard are not limited to copyright infringement, as set forth more completely in the March 31, 2009 Video License Agreement for UGC Video Service Providers, including without limitation Paragraphs 1(b) and 1(g) thereof.

No one knows what Paragraphs 1(b) and (g) say (except Googlers and Universal), but the letter excerpted above implies that Universal has some sort of special deal to arbitrarily remove stuff it doesn't like from YouTube, even if that stuff is legal.